"Capitalist-Roaders" In China

February 21, 1997

China-watchers say the late Deng Xiaoping had a magical touch in leading his country's economy from communism to a sort of capitalism. But they question whether his successors have the will and means to carry the transition further.

Foreign direct investment in China has gone from nearly nil in 1982 to over $35 billion in 1995.

But some analysts say the country must improve its public works and legal systems for progress to continue -- and certainly turn around its deplorable human rights record.

Observers say Deng had the influence to override those who thought economic modernization should proceed at a slower clip. And he had sufficient vision to embrace some painful, but necessary, economic reforms.

He began to allow companies to lay off workers and gingerly began to accept the concept that companies could go bankrupt.

Part of his legacy is that economic restructuring is no longer an ideological concept, but a technical one.

When the Chinese leadership debates how to introduce capital markets or dissolve inefficiencies in the state sector the debate is no longer over whether these steps are allowable -- but about the concrete processes of how to orchestrate the change.

Some economists say there may be possibilities for faster and more substantial progress if younger, well-informed technocrats replace the ideological old guard and are allowed to proceed with restructuring and reforms.

Source: Sheryl WuDunn, "Can Deng's Heirs Finish the Long March to Capitalism?" New York Times, February 21, 1997.